NACDS, NCPA oppose pursuing new Medicaid cuts, urge completion of current rulemaking
ALEXANDRIA, Va. — A proposal to further reduce Medicaid drug reimbursement that was included in President Obama’s fiscal year 2014 budget plan is “premature” and federal Medicaid officials should focus on modifying and completing already proposed regulations to set future federal upper limits for reimbursement of most generic drugs, the National Association of Chain Drug Stores and the National Community Pharmacists Association argued on Friday.
The trade groups sent a letter to the U.S. Centers for Medicare and Medicaid Services, which runs Medicaid at the federal level. In it, they outlined concerns with a proposal to further reduce Medicaid drug reimbursement that was included in President Obama’s fiscal year 2014 budget plan.
“While the goal of this provision may be to decrease Medicaid costs, we believe it may in fact reduce access to prescription drugs and pharmacy services for Medicaid patients, resulting in increased overall healthcare expenditures,” said NACDS president and CEO Steve Anderson and NCPA CEO B. Douglas Hoey in their letter.
The groups called the new proposal “premature” because CMS has not yet completed its ongoing rulemaking process by which it intends to establish new FULs that are based on Average Manufacturer Price. The FULs would apply to the vast majority of generic drugs (or “multi-sourced” generics).
CMS has published a series of draft FULs for hundreds of drugs. However, the proposed payment rates require significant adjustment. NACDS and NCPA have objected to the draft FULs, noting that they would pay pharmacies well below their costs of serving Medicaid patients and such cuts could force some pharmacies out of the Medicaid program as well as undermine the incentive to dispense cost-saving generic drugs. Fourteen U.S. Senators and 40 U.S. Representatives have written to CMS in objection to its draft FULs. CMS’ obligation to calculate new FULs was set forth in the Patient Protection and Affordable Care Act.
“[A]dditional efforts by CMS are necessary to ensure that pharmacies are not reimbursed below their costs using the reimbursement formula created by the Affordable Care Act,” Anderson and Hoey added in their letter. “We urge the agency to utilize the rulemaking process to implement the Medicaid pharmacy provisions in a manner consistent with congressional intent, rather than pursuing policies that would further cut pharmacy reimbursement.”
NACDS and NCPA also noted in the letter that research has shown how prescription drug use and pharmacy services can help reduce healthcare costs; that Medicaid expansion and new healthcare exchanges will drive more demand for healthcare services; and that pharmacists are playing a larger role in healthcare delivery.
“We welcome the opportunity to continue our partnership with CMS on the development of comprehensive Medicaid pharmacy reimbursement policy that maintains the strong link between community pharmacies and Medicaid patients,” Anderson and Hoey noted in conclusion.
Walgreens creating competitive advantage through outcomes approach to health management
Walgreens released a research article on how health care focused on outcomes could really contribute to lowering healthcare costs. The idea is that by improving individual patient experience, improving the health of the overall patient population and reducing the per capita cost of health care, you can realize better patient outcomes out of invested health resources.
If you take a really close look at what core competencies are necessary to better realize success in that approach, it becomes evident that retail pharmacy is an ideal setting for the process.
Not only does retail pharmacy represent more convenient access, as compared to other healthcare settings, but a lot of this Walgreens is already doing with its loyalty program. The approach is all about aggregating healthcare data and sorting that data to better predict patient behavior. With this you can better target individual patients with personalized interventions (the targeted strategy).
It’s also about delivering that health care when, how and where a patient wants it. By tying Balance Rewards loyalty incentives initiatives like Walk with Walgreens and Steps, and fielding a readily accessible health professional base, Walgreens can go a long way toward improving health at the macro level, too (the population strategy). Walgreens’ comprehensive vaccination offerings and the recent expansion of clinical services available at Take Care Health into assessing, treating and managing chronic conditions are more examples of how Walgreens can help improve the health of their patients.
But the real synergies will be realized by bringing those two strategies together (the stratified approach) by helping to identify the most efficient way to motivate healthier behavior among patient populations. Judging by Walgreens’ Accountable Care Organization partnerships and the number of on-site workplace pharmacies and clinics they operate, Walgreens already has a wealth of experience tying it all together.
This is how patients will be won (and lost) in the future. By demonstrating a proven ability to lower healthcare costs, Walgreens will be able to attract more patient populations tied to employer and health system partners into their stores. Couple that with a strong service-centric front-end proposition, and Walgreens has just formed a significant patient recruitment and retention strategy that will be pretty difficult to replicate.
Celgene head elected as PhRMA chairman
SAN DIEGO — Celgene Corp. chairman and CEO Robert Hugin has been elected as chairman of a pharmaceutical industry trade group.
The Pharmaceutical Research and Manufacturers of America announced the election of Hugin, as well as Pfizer president and CEO Ian Read as chairman-elect of the PhRMA board of directors and Merck chairman, president and CEO as board treasurer.
Hugin succeeds Eli Lilly president, chairman and CEO John Lechleiter as chairman, PhRMA said.